- According to the Organization for Economic Cooperation and Development, the world economy will decline by 4.5% this year, despite a rapid recovery from the COVID-19 epidemic.
- The OECD’s latest economic outlook is less negative than expected, but the organization said that 2020 would still mark the worst contraction in growth since World War Two.
- China, the US and Europe are expected to perform better than expected, while many countries are still combating the virus.
- The OECD chief economist said, “Without government assistance, bankruptcies and unemployment can grow faster than war and take a toll on people’s livelihoods for years to come.”
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The organization said on Wednesday that the global economy faces the prospect of the most dramatic collapse this year since the second world war, as the coronovirus epidemic spreads through the world’s population.
In its latest economic outlook on Wednesday, the OECD said that the world economy would contract by 4.5% this year, improving its most recent prediction of a second coronavirus virus to 7.6%.
Some of the world’s emerging market powerhouses, such as India and Mexico, may see double-digit contraction in their economies.
OECD chief economist Lawrence Boon said, “The world is facing a severe health crisis and the most dramatic economic downturn since the second world war. The end is not yet in sight.”
Output will grow 5% in 2021, the report said, but the outlook remains “exceptionally uncertain” due to several factors.
The OEECR stated, “The possibility of new outbreaks of the virus, health measures and restrictions in individuals, confidence in the consumer and business, and the extent to which help is sought to help maintain jobs and support businesses” . ” Report good.
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Although the expected decline in global production is smaller than it initially occurred, it does not reflect the true extent of the catastrophe in many countries because there are “considerable differences” between them.
China, the US and Europe are expected to perform better than expected. On the other hand, growth forecasts for India, Mexico, South Africa, Argentina and the UK have worsened, as all are projected to fall by more than 10%.
The report states that business sectors associated with the locale business, such as transportation, recreation and leisure, may face a shutdown. This can be particularly cruel in emerging market economies where rising unemployment can lead directly to poverty and scarcity for millions of people.
Central banks and governments in rich and developed nations launched an unprecedented wave of trillions of dollars in fiscal and economic stimulus to offset the worst effects of the epidemic.
“It is important that governments avoid spoiling fiscal policy too quickly, as it did after the last financial crisis,” Boone said. “Without continued government support, bankruptcies and unemployment can escalate faster than war and take a toll on people’s livelihoods for years to come.”
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